Kenya’s economy could be much larger than its current size. One of the factors that has hindered economic growth is the increasing problem of gambling addiction.
The Kenya Revenue Authority (KRA) recently reported collecting a record-breaking Ksh13.2 billion from betting companies during the 2024/2025 financial year. KRA officials praised this performance and attributed the success to better tracking systems linked to betting firms.
However, this “success” is built upon an activity with substantial economic and social consequences costing the country trillions of shillings yearly. Let’s break down the cost.
Financial losses to individuals and businesses
This is one of the most direct costs of gambling. A significant number of Kenyans, especially low-income individuals, engage in online betting. Their losses translate to severe financial consequences, including reduced personal savings, selling of assets, and loss of money meant for essential household expenses. And ultimately, this is the main reason many businesses in the country close. It’s outrageous that we celebrate gambling as a revenue source, yet we keep wondering why businesses are failing, which subsequently shrinks the tax base.
Hundreds of Billions mopped up from the economy
At its fundamental level, gambling mops up hundreds of billions from Kenya’s economy. Of course, gamblers lose more money than they win. This means a significant amount of individual or household income is channeled into the gambling industry. And the fact that most betting companies are owned by foreigners means that the money lost by gamblers is flown out of the country and never reinvested in our economy.
The latest figures reveal the immense scale of money lost, and it’s disheartening. A leaked report from 2019 revealed Kenyans placed bets worth over Ksh 30 billion in a single month, translating to an annual loss of over Ksh 360 billion. Another figure, published in the Daily Nation, showed that Kenyans bet Ksh 722 billion in just twelve months.
When hundreds of billions are drained from the economy, it reduces money in circulation, leaving less money available for productive economic activities. Ultimately, this led to economic decline. Business closes, jobs are lost, and the tax base constricts.
Hindered innovation and enterpreneurship
Innovation and entrepreneurship are key factors in overcoming the issue of youth unemployment. Unfortunately, we have normalized gambling among young people, a situation that has detrimental effects on innovation and entrepreneurship. A society with a widespread gambling culture would ultimately see a decline in genuine innovation. People are less likely to pursue the difficult and often slow process of building something new when they are enticed by the promise of easy money from gambling.
Many young people gamble their hard-earned money for short-term gains (most end in losses) instead of investing their resources in productive, long-term ventures. The persistent losses may deny many young people the opportunity to invest in the real economy, like agriculture or business. For business owners, the financial losses from gambling drain the capital that could otherwise be used for scaling, hiring talent, research and development, and adoption of new technologies.
Also, the culture of gambling encourages high-risk investments such as forex trading, cutting investment in the real economy. As a result, less capital is available for startups that require long-term investment.
The actual cost of the opportunity we’re missing is immeasurable. Imagine the businesses that never start, innovations that never launch, and the lost talents. My estimation is that we lose trillions of shillings (not one) in potential GDP each year.
Loss of productivity
Gambling can cause significant productivity loss in the workplace due to issues such as reduced focus, absenteeism, and poor work performance. Individuals addicted to gambling are less likely to commit adequate time and effort to their work, leading to a loss of organizational productivity. This means a slow growth in the country’s GDP.
Social costs
Gambling addiction leads to dishonesty, secrecy, and erosion of trust within families. Spouses are neglected and children betrayed, leading to strained relationships that often end up in separation or divorce. The dysfunctional or broken families cause a long list of social issues such as child neglect, teen pregnancy, substance abuse, and increased crime. Also, children raised in an unstable home environment receive poor education, hindering their future economic well-being. Dealing with these social issues imposes a substantial financial burden on the government through investment in welfare programs.
The family unit is a fundamental part of society that influences the country’s overall productivity. When families are disrupted, it can trigger economic turmoil.
Mental health issues
Gambling addiction is a major contributor to mental health issues, including depression, anxiety, and even suicide. A study in Mathari Hospital found 78% of respondents had a gambling disorder. Moreover, tragic stories of gambling-related suicides are becoming more common in Kenya, particularly involving young people who have lost significant sums of money, including school fees or family savings.
The cost of mental health issues caused by gambling is huge, encompassing direct costs such as medication and therapy, and indirect costs like lost productivity.
Final thoughts and Recommendations
Gambling is a destructive behavior with a catastrophic impact on our economy. While gambling contributes to government tax revenue, the social and economic costs are substantial. We must confront gambling’s true nature – a parasitic scourge that’s eroding our economic foundation and jeopardizing our future prosperity. Mere half-measures like increasing betting age limits or minimum stake for gambling are insufficient. A complete ban on gambling is the only way out of this mess.
